Democrats, Republicans Ready Housing Bill for Discussion
- Apr 03, 2008
New York–Senate Democrats and Republicans worked Wednesday to prepare the bipartisan housing bill for debate, CNNMoney.com reports.The bill may be discussed in the Senate on Thursday; it is expected to include funding to help borrowers avoid foreclosures and to help increase activity in neighborhoods with vacancies.Some information was released on Wednesday about the bill, including a proposal to update the Federal Housing Authority’s loan insurance program, raising loan limits from 95 percent of an area’s median home price to 110 percent, with a cap of $550,000. The bill also may suggest that FHA loan down payment requirements be increased from 3 percent to 3.5 percent, CNNMoney.com said. In addition, the bill would increase homebuilders’ net operating loss carryback, extending the time a company can apply its 2008 and 2009 losses to previous tax bills from two to four years. The provision would allow builders who saw profits jump during the housing boom to offset their earnings with more recent losses, which could help more builders stay in business.States would be able to give $10 billion in tax-free municipal bonds; bond proceeds would go toward subsidizing subprime mortgage refinancing. Currently, states can only issue tax-free bonds to subsidize mortgages for first-time homebuyers or buyers purchasing a home in troubled areas.The bill could give a $7,000 tax credit for homebuyers who purchase foreclosed homes or homes in which the owner is in default. Homeowners who currently take the standard property tax deduction would also be allowed to take a second deduction–$500 for single filers and $1,000 for couples filing jointly.Per the bill, $100 million would be available for housing counselors to assist homeowners facing foreclosure and offer $4 billion in state and local government grants to purchase and revamp foreclosed properties. However, the White House has expressed concern that the funding could become a rescue plan for lenders and speculators, according to CNNMoney.com.The bill may also call for increased transparency in the mortgage application process so consumers would be able to comprehend their loan terms–and wouldn’t face unexpected increases.